Carbon dots (C-dots) are emergent nanomaterials of carbon-based materials family and have gained significant research interest because of their environmental friendliness, brightness, tunable fluorescence, chemical inertness, low cost, simple synthetic route and availability for wide variety of starting materials. These are considered as potential competitor to conventional semiconductor quantum dots in terms of lower toxicity. It is found that their involvement in adverse fields of chemical and bio-sensing, bio-imaging, drug delivery, photocatalysis, electrocatalysis and light-emitting devices makes as an ideal and potential candidate. Interestingly they are treated as important and versatile platform for engineering multifunctional nanosensors. This review focuses on the remarkable research progress of high quality tunable fluorescent C-dots synthesis via familiar top-down and bottom-up approaches. Their fluorescence origin has been nicely demonstrated by quantum confinement effect, surface state and molecular fluorescence properties. Finally, selective and sensitive atmospheric prevailed volatile organic compounds recognition has been explained with C-dots in both solution and solid phase along with discussion on challenging and future research direction. © 2020 Taylor & Francis Group, LLC.